JOHANNESBURG, Feb 24 (Reuters) – A mass leak of South
African espionage secrets will cause many foreign agencies to
think twice before sharing information with Pretoria, hampering
its efforts to walk a delicate diplomatic tightrope between East
and West, experts said on Tuesday.

Britain’s Guardian paper and Gulf TV channel Al Jazeera said
they had obtained hundreds of dossiers, files and cables from
the world’s top spy agencies to and from South Africa, dubbing
it “one of the biggest spy leaks in recent times”.

The biggest revelation so far is an assessment by Mossad
that counters Israeli Prime Minister Binyamin Netanyahu – backed
by a cartoon picture of a bomb – asserting at the United Nations
in 2012 that Iran was a year away from making a nuclear device.

Iran was “not performing the activity necessary to produce
weapons”, the Israeli agency said in one report that outlined
its understanding of Tehran’s attempts to produce enriched
uranium, the main ingredient for a nuclear bomb.

More seriously for South Africa, a prominent ‘non-aligned’
state reluctant to take sides in international disputes, another
cable reveals how Washington coerced Pretoria into spying on
Iran, with which it enjoys firm diplomatic and commercial ties.

Even though the National Intelligence Agency stressed it did
not see Tehran as a threat, it still set up a covert operation
to compile the names, addresses and personal habits of every
suspected Iranian agent in South Africa.

Suggestions South African spooks scoped out Persian carpet
shops in the belief they were a front for Iranian spies were
easy fodder for newspapers, with the Times reporting the leaks
under the front page headline “Ali Baba and the forty spies”.

Besides the immediate embarrassment, experts said the
security breach meant foreign cooperation with South African
agencies would be likely to come under review for fear of other
potentially more damaging secrets being unearthed.

Other cables show Washington enlisted Pretoria’s help in
getting in touch with a potential North Korean double agent and
reaching out to Palestinian group Hamas.

“A leak like this affects the credibility of the agencies
and how they cooperate,” said Mike Hough, a retired professor
from Pretoria University’s Institute for Strategic Studies. “It
could lead to the termination of certain projects.”

The agency was already in hot water for using a cell-phone
signal jammer in parliament this month at President Jacob Zuma’s
State of the Nation address, a move that prompted a media outcry
and walkout by furious opposition MPs.

Forced to explain, Security Minister David Mahlobo told
Johannesburg’s Talk Radio 702 the device had been deployed to
create a ‘no-fly zone’ for drones to protect Zuma, but then said
it had also been turned on in error.

There has no official response from the government to the
Guardian and Al Jazeera reports.

“There’s no country in the world that would comment on this
sort of thing,” one foreign ministry spokesman said.

JOHANNESBURG, Jan 27 (Reuters) – Wrapping up a monetary
policy speech last week, Nigerian central bank governor Godwin
Emefiele declared that the naira, which has crumpled
to 190 to the dollar with the drop in oil prices, was
“appropriately priced”.

However, when currency dealers in Lagos and other financial
centres in Africa and Europe got to work the next morning and
turned on their computers, many were surprised to find the naira
wasn’t priced at all, let alone “appropriately”.

Instead, as they stared at their screens, for three hours
traders were presented with blank spaces where normally they see
the ‘bids’ and ‘offers’ that determine the market price of the
currency of Africa’s biggest oil producer and largest economy.

Rather than a computer glitch or power outage — common
hiccups in any frontier market — the lack of prices was
deliberate: all Nigeria’s banks were refusing to trade while
their top dealers met behind closed doors to chew over
Emefiele’s pronouncements, according to those involved.

Among the decisions reached by the Financial Markets Dealers
Association (FMDA), as the club of 40 banks, discount houses and
brokerages is known, was an unofficial ‘circuit-break’ agreement
to halt trade if the naira fell more than 2 percent in a day.

FMDA chief executive Wale Abe insisted no central bank
officials were present at Wednesday’s meeting and said it was an
entirely voluntary measure to curb volatility, in line with the
body’s support for financial market stability and maturity.

However, the impromptu trading interruption runs counter to
that objective, while the seemingly ad hoc decisions from a
collective of rival banks raise questions about transparency,
with some analysts suspecting hidden central bank regulation.

“This is extraordinary, especially when you’re trying to
encourage an independent market where market forces determine
the rate and you don’t have regulators casting a heavy hand,”
said one South Africa-based currency strategist, who asked not
to be named.

“They’re basically setting limits on where the interbank
market can trade,” the strategist added. “It’s very informal and
that’s the problem. You can’t begin to understand the market if
you’re not sure what the underlying policy is.”

The central bank declined to comment.

BEHIND CLOSED DOORS

As the price of oil — the source of 95 percent of Nigeria’s
foreign exchange — has collapsed in the last six months, the
naira has tumbled more than 15 percent to a series of record
lows, knee-capping the economy just weeks before nationwide
elections on Feb. 14.

Over the last year, the central bank has burned through 20
percent of its reserves — $28 million a day — in defence of a
currency that has remained under unrelenting pressure because of
a basic lack of petro-dollars.

In mid-January, reserves stood at $34.5 billion.

Besides an official 8 percent devaluation in November
accompanied by a 100 basis point interest rate hike to a record
13 percent, the dwindling reserves have forced the central bank
into less orthodox measures.

Prominent among these has been to declare war on currency
“speculation” by making commercial banks close off their
currency positions at the end of a trading day, rather than
maintain an overnight stance on either the naira or dollar.

It relaxed that ban an inch last week but the market remains
very illiquid, to the concern of outside investors such as JP
Morgan, which threatened this month to eject Nigeria from its
influential Emerging Markets Bond Index as a result.

The FMDA’s new-found clout is also unlikely to convince
outsiders about the central bank’s control of the currency or
the market, especially as last week was not the first time its
members have brought trading to a halt for an hour or more.

“It sends a strong signal to the central bank,” said Angus
Downie, head of research at pan-African lender Ecobank.

“It’s quiet a drastic step to take and it raises the debate
on the value of the naira, with dealers stepping out to say ‘We
won’t trade.’”

However, FMDA chief executive Abe insisted there was no
tension with the central bank, which enjoys ‘observer status’ at
his organisation.

“At the end of the day, what is important is the goals are
the same: to have a market that is transparent, that is open and
which can compare with developed or mature markets, or emerging
markets,” he told Reuters.

In a nod to investors, he also said the group had decided to
make their collective decisions clear from now on, even if the
deliberations of their meetings remained unreported.

“If you have a trade association, do you have every Tom,
Dick or Harry getting into meetings? No,” he said. “But any
meeting we have from now, you will have one of us addressing the
press. You will have the statement issued.”

JOHANNESBURG (Reuters) – Anglo American Platinum, the world’s top platinum miner, has received a 4.5 billion rand ($385 million) offer for its 49 percent stake in the Bokoni mine in northeast South Africa, a source with direct knowledge of the matter said on Wednesday.

South African platinum mining houses are on a restructuring drive that includes selling off under-performing and labor-intensive shafts following a five-month strike this year that dashed hopes of making them profitable.

Amplats’ stake in the Bokoni mine and other shafts around Rustenburg, the epicenter of the strike, has been up for sale as part of its drive to switch to more mechanized mining. Amplats is a unit of global miner Anglo American.

Baroka Tribal Mining, a community-owned firm in Limpopo province, will also buy Amplats’ 22.5 percent indirect stake in its joint venture partner, Atlatsa Resources, a document seen by Reuters showed.

The rest of Bokoni – a four-shaft mine that produces 170,000 ounces of platinum group metals a year – is owned by the Toronto-based Atlatsa.

The Amplats stake in Atlatsa is worth about $48 million, according to Reuters data.

“Baroka will also be taking on 1.7 billion rand in debt that Amplats loaned to Atlatsa as part of the deal,” the source, who spoke on condition of anonymity, told Reuters.

Spokesmen for Baroka and Amplats were not immediately available to comment.

A document, dated Dec. 18, seen by Reuters showed that Baroka has the support of the state-owned pension fund, the Public Investment Corporation (PIC), in its bid for the mine.

The source said the PIC was set to fund part of the transaction in exchange for a stake in the mine. Some of the funding would come in the form of a loan from local lender Nedbank, the source added.

HARARE (Reuters) – When veteran Zimbabwe leader Robert Mugabe sacked his vice-president in front of 12,000 baying party members last week, Emmerson Mnangagwa sat quietly in the crowd, a green baseball cap pulled low over his eyes.

The man who stood to gain most from the departure of Joice Mujuru betrayed nothing by his face and gentle clapping — a survival tactic honed during five decades of service from teenage guerilla to minister of defense, finance and justice for the mercurial now 90-year-old Mugabe.

His cap, however, spoke volumes.

Emblazoned across its front, next to the obligatory black-and-white portrait of a grim-faced Mugabe, were four words: “Indigenise, Empower, Develop, Employ” — a slogan of Mugabe’s ruling ZANU-PF party.

If, as analysts expect, the inscrutable Mnangagwa is named this week as new vice-president and Mugabe’s de facto successor, the country will likely see more of the nationalism that has hit investment and growth in the last six years.

It’s a tactic that ZANU-PF embraced to deflect its responsibility for the economic collapse in 2000-2008 – stemming from its disastrous policy of reclaiming white farms and hyperinflation – that sits alongside its continuing blame of outsiders and Western sanctions for Zimbabwe’s troubles.

During the three-day party congress, Mnangagwa’s one speech enforced the message from his clothing.

Besides formally recognizing the black in the national flag as a symbol of Zimbabwe’s indigenous people, the 68-year-old unveiled revisions to the party’s constitution aimed at emphasizing the party’s adherence to the “total ownership and control” of Zimbabwe’s natural resources.

It was a key insight to the party’s direction as it contemplates life beyond Mugabe, Zimbabwe’s only leader since independence from Britain in 1980.

“We will remain forever masters of our own destiny,” Mnangagwa said, to cheers from the crowd.

POLICY CLARITY?

Such adherence to the mantra of ‘indigenisation’ is worrying for businesses eager to tap the southern African nation’s mineral wealth, and for Zimbabweans desperate to attract the foreign capital needed to kick-start their flat-lining economy.

Indigenisation is loosely based on neighboring South Africa’s Black Economic Empowerment drive to address the legacy of apartheid, and requires foreign firms to transfer a majority of their shares to local black Zimbabweans.

But the policy has had a chilling effect on investment, not least because six years after its inception Harare has still not clarified the rules, saying different sectors will be treated differently.

Some 4,600 Zimbabwean firms have closed in the last three years, with the loss of 55,000 jobs. Growth remains anemic and unemployment stands above 80 percent.

At an investment conference in Johannesburg last month, Chinamasa inadvertently revealed the extent of confusion and double-speak in Zimbabwe’s corridors of power.

“I hope that sooner or later I will be able to clarify, on a case by case basis, the law of indigenisation,” he said. “We’ve been working very hard on trying to build consensus on clarifying it.”

OTHER PRIORITIES

But with ZANU-PF in the grips of an intensifying personality cult and politicians jockeying for space in a post-Mugabe administration, economic reality is slipping ever further down the list of the party’s priorities.

In eight hours of congress speeches on Saturday, its only mention came from a 13-year-old schoolboy reading from an autocue — and battling a deafening sound system — about the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, known by the catchy acronym ZIM-ASSET.

By contrast Mugabe focused his two hours of ad lib speaking on diatribes against perceived enemies such as former colonial power Britain – a “little, little island” – and “treacherous” factions within ZANU-PF led by the departed Mujuru.

Sowing further confusion and prolonging anxiety about his lack of clear successor, he then declined to nominate his two deputies for another four or five days, saying he did not wish to “rush” the decision.

“This is all about power. Everything else takes second place,” one senior ZANU-PF source, who did not wish to be named, said of the congress. “The economy doesn’t matter.”

HARARE (Reuters) – When veteran Zimbabwe leader Robert Mugabe sacked his vice-president in front of 12,000 baying party members last week, Emmerson Mnangagwa sat quietly in the crowd, a green baseball cap pulled low over his eyes.

The man who stood to gain most from the departure of Joice Mujuru betrayed nothing by his face and gentle clapping — a survival tactic honed during five decades of service from teenage guerrilla to minister of defence, finance and justice for the mercurial now 90-year-old Mugabe.

His cap, however, spoke volumes.

Emblazoned across its front, next to the obligatory black-and-white portrait of a grim-faced Mugabe, were four words: “Indigenise, Empower, Develop, Employ” — a slogan of Mugabe’s ruling ZANU-PF party.

If, as analysts expect, the inscrutable Mnangagwa is named this week as new vice-president and Mugabe’s de facto successor, the country will likely see more of the nationalism that has hit investment and growth in the last six years.

It’s a tactic that ZANU-PF embraced to deflect its responsibility for the economic collapse in 2000-2008 – stemming from its disastrous policy of reclaiming white farms and hyperinflation – that sits alongside its continuing blame of outsiders and Western sanctions for Zimbabwe’s troubles.

During the three-day party congress, Mnangagwa’s one speech enforced the message from his clothing.

Besides formally recognising the black in the national flag as a symbol of Zimbabwe’s indigenous people, the 68-year-old unveiled revisions to the party’s constitution aimed at emphasising the party’s adherence to the “total ownership and control” of Zimbabwe’s natural resources.

It was a key insight to the party’s direction as it contemplates life beyond Mugabe, Zimbabwe’s only leader since independence from Britain in 1980.

“We will remain forever masters of our own destiny,” Mnangagwa said, to cheers from the crowd.

POLICY CLARITY?

Such adherence to the mantra of ‘indigenisation’ is worrying for businesses eager to tap the southern African nation’s mineral wealth, and for Zimbabweans desperate to attract the foreign capital needed to kick-start their flat-lining economy.

Indigenisation is loosely based on neighbouring South Africa’s Black Economic Empowerment drive to address the legacy of apartheid, and requires foreign firms to transfer a majority of their shares to local black Zimbabweans.

But the policy has had a chilling effect on investment, not least because six years after its inception Harare has still not clarified the rules, saying different sectors will be treated differently.

Some 4,600 Zimbabwean firms have closed in the last three years, with the loss of 55,000 jobs. Growth remains anaemic and unemployment stands above 80 percent.

At an investment conference in Johannesburg last month, Chinamasa inadvertently revealed the extent of confusion and double-speak in Zimbabwe’s corridors of power.

“I hope that sooner or later I will be able to clarify, on a case by case basis, the law of indigenisation,” he said. “We’ve been working very hard on trying to build consensus on clarifying it.”

OTHER PRIORITIES

But with ZANU-PF in the grips of an intensifying personality cult and politicians jockeying for space in a post-Mugabe administration, economic reality is slipping ever further down the list of the party’s priorities.

In eight hours of congress speeches on Saturday, its only mention came from a 13-year-old schoolboy reading from an autocue — and battling a deafening sound system — about the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, known by the catchy acronym ZIM-ASSET.

By contrast Mugabe focussed his two hours of ad lib speaking on diatribes against perceived enemies such as former colonial power Britain – a “little, little island” – and “treacherous” factions within ZANU-PF led by the departed Mujuru.

Sowing further confusion and prolonging anxiety about his lack of clear successor, he then declined to nominate his two deputies for another four or five days, saying he did not wish to “rush” the decision.

“This is all about power. Everything else takes second place,” one senior ZANU-PF source, who did not wish to be named, said of the congress. “The economy doesn’t matter.”

HARARE (Reuters) – Ninety-year-old Zimbabwean President Robert Mugabe promoted his wife to the top ranks of his ZANU-PF party on Saturday but delayed filling vacant senior posts, prolonging anxiety over his lack of successor.

Africa’s oldest head of state and the only leader Zimbabwe has known since independence from Britain in 1980 was elected unopposed at the five-yearly ZANU-PF meeting, putting him on track to contest the 2018 presidential elections, when he will be 94.

After this week’s sacking of vice-president Joice Mujuru, who only three months ago was favourite to succeed him, Mugabe said he needed more time to vet candidates for the Politburo, the party’s top decision-making body, and the two deputy posts.

“I don’t want to rush it, so be patient. By mid next week, by Wednesday or Thursday, we will make an announcement,” he told some 12,000 party members crammed into a vast marquee erected on a dusty parade ground in central Harare.

His wife, Grace, has acceded to the top of the powerful Women’s League, capping a meteoric three-month political rise based in part on her vitriolic public attacks on Mujuru.

At the start of the three day congress, Mugabe accused Mujuru of leading a ‘treacherous cabal’ trying to end his 34-year grip on power, effectively crushing any immediate political ambitions she may have harboured.

Mujuru did not attend any part of the congress, choosing instead to watch proceedings on television at her Harare home, according to a source close to her.

Most analysts say her absence has cleared the way for justice minister Emmerson Mnangagwa, a hardline Mugabe loyalist known as ‘The Crocodile’, to position himself to take over when Mugabe finally succumbs to mortality.

However, Mnangagwa refused to be drawn on his prospects.

“Until Thursday,” he told Reuters at the end of Mugabe’s closing congress address. “It is unfinished work.”

In the interim, the nation of 13 million people will have no designated successor, a recipe for serious political instability should Mugabe be incapacitated or worse.

“He wants to convey the message that all now resides with him,” said Eldred Masunungure, a political science professor at the University of Zimbabwe. “But it’s basically a bad way of running a country or a governing party.”

The only other sworn-in senior member of ZANU-PF is his wife. Analysts say that without the protective aegis of her husband, the 49-year-old one-time government typist does not enjoy popular support in the party, having played no part in the 1970s liberation struggle against white colonial rule.

The inconclusive outcome to congress has only added to the political uncertainty in a country grappling with the after-effects of an economic meltdown that critics blame on decades of mismanagement by Mugabe.

His controversial policies, including the seizure of white-owned commercial farms for landless blacks, have alienated Western donors and governments, who also accuse the veteran leader of rigging elections since 2000 to stay in power.

HARARE (Reuters) – Ninety-year-old Zimbabwe president Robert Mugabe purged the deputy seen just months ago as his most likely successor, denouncing her before party loyalists as leader of a “treacherous cabal” bent on removing him from power.

In a thunderous speech to 12,000 cadres of his ZANU-PF party, Mugabe threatened to turn the law on Vice President Joice Mujuru, whose status as presumed successor for Africa’s oldest head of state has evaporated in the past three months since she became the target of attacks in state media.

“As we thought we were working together, they were doing their own thing, a cabal parallel to the party, planning their own future, planning how to change the leadership, planning about kicking the president out of power,” Mugabe said.

His comments appear to end the future in the ruling party of Mujuru, seen by some in the Zimbabwean business community as a common-sense leader who could have helped restore relations with the West that fell apart during the latter half of Mugabe’s 34 years in power.

Every time he mentioned 59-year-old’s name, the crowd crammed into a cavernous tent in a dusty field near Harare’s central business district erupted into jeers and cackles.

“Those who are or were involved in corrupt activities, you are going to be prosecuted wherever we have enough evidence,” he continued in the Shona language, accusing Mujuru of “gross corruption” in several gold and diamond mining deals.

He provided no evidence.

Mujuru, a former guerrilla with the nom de guerre “Spill Blood”, was not present at the meeting, a ruling party congress that is meant to anoint its leadership for the next five years.

A source close to Mujuru said she was watching the speech on television at her Harare home and would not be commenting.

Her only response during the three-month campaign against her by state media and Mugabe’s 49-year-old wife, Grace, has been a short written statement in which she has denied allegations of corruption and plotting an assassination attempt.

CROCODILE LIES IN WAIT

Despite his advanced years and rumors of cancer, Mugabe is running unchallenged as ZANU-PF leader. After his speech, Mugabe stood on the podium decked out in a bright yellow jacket and baseball cap, swaying gently from side-to-side and clapping to the rhythm of a deafening jazz band.

Assuming he is still fit and able, he will be ZANU-PF’s leader when the next elections come round in 2018.

With Mujuru gone, the succession race is more open.

Despite her political inexperience, Grace Mugabe is being elevated to the head of the powerful ZANU-PF Women’s League, giving her a seat on the party’s Politburo, its top decision-making body.

However, the one-time government typist faces an uphill struggle if she aims to succeed her husband, having played no part in the armed struggle in the 1970s against white rule in the former Rhodesia that is seen as conferring legitimacy on senior ruling party figures.

Justice minister Emmerson Mnangagwa, a 64-year-old career Mugabe loyalist nicknamed “The Crocodile” is seen as a likely candidate to assume the mantle of future successor.

The highest profile victim so far has been Africa’s top
producer, Nigeria, which was forced to devalue its naira
currency by 8 percent this week after the central bank admitted
dwindling reserves were making it hard to defend it.

In dollar terms, the devaluation knocked $40 billion off the
value of Nigeria’s economy – considerably more than the $32
billion worst-case scenario the World Bank projected in October
for Ebola’s economic impact on the entire sub-Saharan region.

Last week, the bank’s chief Africa economist said the latest
assessments of the epidemic suggested the economic fallout might
not be as bad as feared, and was likely to be closer to the $3-4
billion end of its projected range.

The same cannot be said for crude-backed African currencies.

Even after the Nigerian devaluation and a 100 basis point
hike in interest rates, the naira came under more
pressure, trading at a record low of 178.85 to the dollar.

It opened flat on Thursday around 177.0, a level that is
already weaker than the de facto 176.40 lower limit of the
central bank’s target band, revealing scepticism the currency
can hold at that level.

In Angola, the continent’s number two oil producer, the
kwanza has shed more than 3 percent since September,
hitting record lows on an almost daily basis amid concerns about
the state of government finances.

A year ago, Luanda was projecting growth of 8.8 percent with
a fiscal deficit of 5 percent of GDP as it poured cash into
reconstruction from a long civil war that ended in 2002.

But its spending plans were all predicated on oil – which
accounts for half of GDP and 90 percent of foreign exchange
earnings – at $98 a barrel.

The government is budgeting a more sober $81 for next year
but even that might be over-optimistic after Brent crude
hit a four-year low on Thursday of $76 as ministers from
oil-producing OPEC countries met in Vienna.

Reserves are at a relatively healthy $27 billion – enough to
prevent a full-scale currency blow-out, analysts say – but if
oil stays below $80 for some time, the kwanza will continue to
weaken and the budget deficit will balloon.

The result is likely to be sharply reduced spending, a big
increase in foreign borrowing, either through Eurobonds or
syndicated loans, and possibly even an International Monetary
Fund (IMF) bailout, as happened after the 2008 financial crisis.

“If there’s no support for oil prices, the budget deficit
could be much larger than 7.6 percent and then you could see an
IMF programme,” said Samantha Singh, an African currency
strategist at Standard Bank in Johannesburg.

Although they have vast agricultural potential, the likes of
Nigeria and Angola import nearly all their food and consumer
goods, which will become more expensive, fuelling inflation and
even raising the prospect of social and political unrest.

Weakening currencies also make imports of machinery more
expensive, hampering Africa’s efforts to capitalise on above
average growth rates by building industries to employ the
millions of young people entering the labour market each year.

EXPLORERS HURTING

Ghana, which became an oil producer in 2011, has already had
to go the IMF route to try to stabilise a plunging cedi
and pull itself out of a fiscal crisis caused in part by
lower-than-expected oil receipts.

Even beyond sub-Saharan Africa’s established oil producers,
which also include Equatorial Guinea, Chad, Sudan and South
Sudan, the effects are being felt as frontier exploration
projects contemplate shrinking margins.

Britain’s Tullow, a major regional player, told
Reuters this month that “short-term variations” in oil prices
would not cast a shadow over projects that may last decades.

Others are less sanguine.

Toronto-listed junior explorer Africa Oil, which
has interests in Kenya, Ethiopia, Somalia and Mali, said this
month its plans in Kenya might be brought into question if the
long-term outlook saw prices dropping below $70 a barrel.

At an OPEC meeting in Vienna, Iraq’s oil minister said crude
prices had a floor around $65-$70.

Share prices in the exploration sector suggest concerns are
growing.

Africa Oil shares have halved in value since September,
while London-listed Afren, whose main assets are in
Nigeria but which also operates in Kenya and Kurdistan, have
slumped to a five-year low.

Savannah Petroleum, whose main hopes are developing
a prospect in southeast Niger, has also nearly halved in value
since it floated in London in August.

JOHANNESBURG (Reuters) – A senior Zimbabwean minister on Friday slammed a report by two South African judges that said Zimbabwe’s 2002 elections, won by long-time President Robert Mugabe, were not free and fair.

At the time of the vote, then South African president Thabo Mbeki glossed over observer reports of irregularities, including violence and intimidation, to declare it reflected the legitimate will of the Zimbabwean people.

But two judges commissioned by Mbeki – Sisi Khampepe and Dikgang Moseneke – compiled a separate assessment which was only released this week, after a South African newspaper won a 12-year legal battle to have it declassified.

The so-called “Khampepe report” was scathing.

“Having regard to all the circumstances, and in particular the cumulative substantial departures from international standards of free and fair elections found in Zimbabwe during the pre-election period, these elections, in our view, cannot be considered to be free and fair,” it said.

Zimbabwe’s finance minister Patrick Chinamasa – justice minister at the time of the vote – said the Khampepe report was the product of a racist South African justice system opposed to the seizures of white-owned farms taking place at the time.

“It’s not the South African government. It’s an individual judge who is biased against us because of the land reform program,” he added.

“You know, we’ve had a lot of bad judgments by the South African courts, especially the white judges.”

Both Khampepe and Moseneke – now deputy chief justice – are black. Mbeki has not commented on the release of the Khampepe report.

Zimbabwe’s main opposition, the Movement for Democratic Change, has accused Mugabe, 90, of rigging elections and intimidating voters since 2000 – charges his ZANU-PF party denies.

After re-election last year, Mugabe’s term of office runs until 2018 and he can run again.

ZANU-PF’s leadership is currently embroiled in a battle to succeed Mugabe, the only leader Zimbabwe has known since independence from Britain in 1980, but Chinamasa denied it was of pressing domestic or international concern.

“He was voted in last year for a five-year term, so why is the issue arising?” he said.

NELLMAPIUS South Africa (Reuters) – To the squatters marking it up this week with sticks, rocks and strips of plastic, ‘Malema Valley’ is a little slice of South Africa they want to call home.

To many others, including the government, the derelict land on Pretoria’s outskirts handed out by supporters of opposition firebrand Julius Malema is the thin end of a land-grab wedge that could ultimately derail Africa’s most advanced economy.

Few South Africans have forgotten the economic catastrophe that unfolded in neighboring Zimbabwe from 2000 when liberation war veterans – with initial acquiescence and then encouragement from President Robert Mugabe – invaded white-owned farms.

For the moment, the ruling African National Congress (ANC) is holding the line, sending riot police to clear the land, owned by Pretoria city council, and dismantle the shacks springing up on makeshift 12m x 12m plots.

“This is no-man’s land. There’s nothing here and people need a place to live. We’ve done nothing wrong,” said unemployed 26-year-old Nelson Poeletso, rolling a yellow police rubber bullet between his thumb and forefinger.

The tough stance could be politically costly for the ANC, which overthrew decades of white-minority rule 20 years ago with promises to provide a ‘better life for all’, backed by a constitution that enshrines the right to ‘adequate housing’.

The reaction to Wednesday’s removal of hundreds of would-be shack-dwellers was a riot, with residents of the township of Nellmapius, 20 km (12 miles) east of Pretoria, burning tires in the street and looting the house of the local ANC councilor.

Egged on by activists from Malema’s ultra-leftist Economic Freedom Fighters (EFF), who said they had 7,000 people signed up for ‘Malema Valley’ housing plots, and with a strong sense of moral entitlement, the shack-dwellers vowed to return.

“We will come back and have this land. That’s not a threat – it’s a promise,” Poeletso said.

SEIZURES

The legacy of apartheid, which saw black South Africans who made up over 80 percent of the population consigned to less than 10 percent of the country, has ensured that land and housing remain highly charged issues.

Since 1994, the ANC has made huge strides, building more than 3 million low-cost houses and providing electricity to 85 percent of homes in 2011, compared with just 58 percent in 1996.

However, it still needs to build 2.3 million houses to accommodate the homeless, who have long resorted to building makeshift shacks around apartheid-era “townships” but seldom strayed in orchestrated fashion onto other pieces of land.

With a budget deficit of 4 percent of GDP – the hangover of a 2009 recession – and ratings agencies downgrading its credit, the government has no more money to throw at the problem.

Housing Minister Lindiwe Sisulu admitted last month that the government was starting to cap its largesse, making a distinction for the first time between those who were adults at the end of apartheid and those who were not.

“We will no longer give people who are young free houses,” she told a conference in Johannesburg. “Those younger than 40 years can build their own houses.”

“OPEN SEASON”

With little affordable land available, such admissions play into the hands of the EFF.

The party won 6 percent of the vote in May on a ticket of nationalization of mines and banks and seizure of land without compensation – a radical Mugabe-style antidote to what it says is unacceptably slow social transformation under the ANC.

‘Malema Valley’ is a classic example.

Ward councilor Precious Marole said the land – bought by the city from a white farmer 15 years ago – had been earmarked for a low-cost housing development to start early next year.

However, after 20 years of waiting in line for homes that never arrived and with the EFF banging the drum, few residents of Nellmapius believed him.

“They (EFF) told people there was land in Pretoria and they must come and grab it,” Marole told Reuters by phone from a safe-house after his home was ransacked. “The EFF believe that everything they want must happen now.”

The result is unprecedented public questioning of the principles on which Nelson Mandela and the ANC negotiated a peaceful and stable handover from apartheid in 1994.

“There was always the implicit threat of the catastrophic transfer of property but the basic deal was to use taxes and the law to change the demographics of the economy and how people live,” said political analyst Nic Borain.